Mercosur eyes Europe for rice trade among other post Brexit and Trump era

Mercosur is an economic and political bloc comprising Argentina, Brazil, Paraguay, Uruguay, and Venezuela. Created in 1991 as Argentina and Brazil sought to improve their diplomatic and economic relations, the bloc saw a fivefold increase in regional trade in the 1990s. However, many experts say Mercosur has failed to live up to its ambitions, and trade within the group has fallen relative to its members’ total trade in the last twenty years. The political and economic crisis in Venezuela, which joined the group in 2012, has revealed fractures within the group. Members have threatened to suspend Caracas for failing to comply with the group’s rules on trade and democracy. Trade within the bloc grew from $4 billion in 1990 to $20 billion in 1997, and in its first decade Mercosur inked trade agreements with Bolivia, Chile, Israel, and Peru. The group began trade negotiations with the European Union in 1999 and the negotiations for an ample trade and cooperation agreement between the European Union and Mercosur are strategic, essential. “Mercosur is of enormous significance for Europe and we are entering a context of uncertainty with the arrival of Donald Trump to the White House”, said Ramon Jauregui, head of the Euro-chamber for Latin America delegation, following on the recent accords signed by the EU with Ecuador and Cuba. Jauregui admitted that items such as beef, rice and sugar are considered “vulnerable” for Europeans and non-negotiable for Mercosur, despite the fact that the EU Agriculture Commissioner Phil Hogan last November called on the South American block to moderate its aspirations.

However Mercosur sources indicate that the three are part of an EU ten-item sensitive list and argue the accord has a raft of benefits for Europe regarding manufacturing, auto-parts, and the chemical industry, among others. Jauregui feels there is clear evidence of a lack of unity among the 28-member EU when they have to face a Trump administration in Washington. Mercosur has a more positive approach according to statements from Brazilian foreign minister Jose Serra, “with Brexit and Trump’s victory, friends must unite”. In effect Jauregui has pleaded EU Foreign affairs commissioner Federica Mogherini “to take advantage” of the current situation when all indicates that a Trump administration might very well emphasize a protectionist policy. Likewise a potential vacuum in Latin America could be occupied by China, despite the close historic and cultural roots with Europe, and not forgetting that most of manufactured goods or with added value from Latam are exported to Europe, thus “Europe should stop looking at its belly button and concentrate in Latin America.” Finally Jauregui recalls that 2017 took off with the EU trade agreement with Ecuador, and joins Colombia and Peru, and in coming months a similar scenario will take place with Cuba, conditioned to cooperation in human rights issues.